Sterling Update: Bank of England Holds Rates

Sterling Update: Bank of England Holds Rates

Here’s the latest currency news from our partner Moneycorp, to help you find out what your money is worth.


GBP/EUR reached a 2024 high of 1.1735 last week, a four-month high and in line with levels not seen since September 2023. As expected, the Bank of England’s Monetary Policy Committee voted to hold rates steady at 5.25% yesterday. Six of the nine-panel committee voted to leave rates where they were, while two voted to increase rates to 5.5%, and one member voted to cut rates. This was the first time in four years that a policymaker had voted to reduce rates.

What was potentially more insightful was the removal of key guidance that borrowing costs could rise again while also opening the possibility of rate cuts this year. Governor Andrew Bailey said: “We’ve had some good news over the past few months. Inflation has fallen a long way from 10% a year ago to 4% now. Things are moving in the right direction.” The Bank also forecast that inflation could fall its target of 2% within a few months.

Market expectations remained unchanged following the meeting, anticipating four quarter-point cuts in 2024, beginning in June.


This week was all about growth and inflation data in the European Union. On Tuesday and Wednesday, a host of Eurozone countries, including France, Spain, Italy and Germany, released their GDP growth and CPI inflation data. Overall, Eurozone inflation fell to 2.8% from 2.9% last month, although this was 0.1% above market forecasts. The EU also narrowly avoided a technical recession after preliminary GDP data came in above expectations of -0.1%, instead coming in at 0%. Spain, Portugal and Italy all experienced growth in the final quarter of 2023, with GDP data coming in at 0.6%, 0.8%, and 0.2%, respectively, while France’s growth flatlined at 0%. However, Germany reported a -0.3% contraction, as it continues to be a significant driver of economic weakness across Europe.

These data points will feed heavily into the questions around when the European Central Bank will be cutting interest rates, with most bets currently on the June meeting. If the trends continue, the stronger-than-expected growth throughout Europe and higher-than-expected inflation could lead to any interest rate cuts being pushed back.

Disclaimer: This commentary does not constitute financial advice.

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